Facebook and Avanti: Not so fast!

One online blogger accurately summed up the much-reported ‘fact’ that London-based satellite operator Avanti had struck some sort of deal with social media giant Facebook. The comment said: “Odd that this deal should be leaked to the press. It must be true as neither Avanti nor Facebook have denied it…”

Avanti cannot deny the ‘talks’ with Facebook because like many other satellite operators the talks are taking place. The truth is much more prosaic, and Facebook is undoubtedly talking to plenty of other better and more trusted names in the satellite business, each of which signed binding ‘Non Disclosure Agreements’ with Facebook. Strange how the Avanti name was ‘leaked to the press’ while nothing leaked from the other players involved.

Of course, Avanti’s highly volatile share price benefited from the un-sourced but “advanced” reports that – in the words of a Daily Telegraph story of November 15th – “It is expected that a deal between Avanti and the social network, under the auspices of its Internet.org initiative, will be announced soon.”

Avanti’s stock price has rocketed over the past month, from £1.90 on October 26th to £3.15 on November 18th, no doubt helped by gossip, rumour and newspaper stories. Back in 2011, the price was £7.30, and some investors have lost fortunes, so the recovery will help recover those losses for long-suffering investors

But the truth is that Avanti’s modest Ka-band satellite capacity, only some of which is “over Africa” is dwarfed by the capacity available from the world’s other satellite players. Which does not mean that they might well benefit from Facebook’s plans to boost connectivity around the world. Facebook has made no secret that it wants to improve access. Facebook founder Mark Zuckerberg spoke on CNN last week about his services to Africa, and East African telco Airtel is duplicating its successful “2 months free Facebook mobile access” Indian (Bharti Airtel) service to Facebook users.

In Kenya and Zambia, for example, Airtel mobile subscribers can access Facebook, BBC News, AccuWeather, Daily Nation, SuperSport, and a dozen other sites ‘free’ and “without data charges”. Facebook (and the operators) need a backhaul service to provide this connectivity. And there are plenty of satellite operators other than Avanti providing this extra connectivity, not least an O3b client in the shape of RagaSat which serves Orange’s customers in the Democratic Republic of Congo.

O3b is not alone. The likes of Intelsat, SES, Eutelsat, Arabsat and others are all busy providing broadband and Internet connectivity to and from Africa. Avanti might, of course, also join this exclusive group.

Of course, Facebook with a market capitalisation of a staggering $207 billion, could absorb Avanti in a heartbeat, and most of the other satellite operators.